Today’s housing market mostly operates out in the open — in one place, buyers surfing Zillow or Redfin can see nearly every home listed for sale.
But in recent months, one of the industry’s largest brokerages, Compass, has been pushing for more sellers to list their homes “privately” — meaning they can only be viewed by buyers represented by a Compass agent. The company is also seeking changes to industry rules to allow them to expand their network of private listings.
Should other brokerages follow Compass’s lead, it could become more difficult for consumers to know what homes are on the market and effectively force them to work with an in-house agent.
“Compass is trying to gain market share … by gating listings,” said Brian Boero, a chief executive of 1000WATT, a marketing agency for residential real estate companies, and a vocal critic of private listings. “In the midst of this historic affordability crisis, you have the nation’s largest broker trying to make it even harder for people to access homes.”
The change comes as home sales nationwide sank to a 30-year low, creating a financial crunch in an industry that raked in record profits during the pandemic housing boom.
“Real estate brokerages are all hungry and trying to figure out how to get a bigger slice of a really contracted market,” Boero said.
Private listings, also known as pocket listings, aren’t new — many of the most expensive homes in the Bay Area last year sold “off-market.” Still, they represent a small fraction of total sales in the region, around 3%, Redfin estimates.
Last year, though, Compass started a campaign that advises sellers broadly — not just high-net-worth ones — to start with a private listing. Compass tells its sellers that this strategy allows them to offer their home to a smaller audience while they stage and prep it for the broader market, generating “early demand.” It also keeps photos and pricing off databases known as multiple listing…
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